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OPINION

Will the Arizona Legislature give homeowners even a tiny property tax respite?

Opinion: What would it say about the Arizona Legislature if, given the opportunity to provide a financial respite to an important class of taxpayers, it chooses to reject it?

At a time when just about everyone is asking, and receiving, financial relief from the COVID-19-induced economic shutdown, should Arizona homeowners get a bit of respite on their property taxes?(Photo: Ingram Publishing/Getty Images/Ingram Publishing)

The COVID-19 shutdown has just about everyone asking for financial relief and every institution that could grant forbearance doing so. Should relief then be extended to Arizona homeowners on their property taxes?

Maricopa County Treasurer Royce Flora believes so. His idea, supported by other county treasurers in the state, has made it to the doorsteps of the Arizona Legislature.

Rep. John Kavanagh reportedly has agreed to include in one of his bills delaying the May 1 deadline on property tax payments by three months, for consideration when lawmakers reconvene later this week.

So far, the political optics are far more compelling, and longer-lasting, than the legislation itself.

From IRS to landlords, many are giving relief

The proposal is said to have the support of individual lawmakers but hardly enough to assure passage or, just as importantly, the backing of leadership to advance to a full vote in the two chambers.

What would it say about the Legislature if, given the opportunity to provide a financial respite to an important class of taxpayers, it chooses to reject it?

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At a time when the IRS has delayed income-tax filing – and payment – for three months?

When the federal government is doling out billions of dollars in stimulus payments, unemployment benefits and loans to businesses, many of them forgivable?

When landlords are asked of forbearance on rent and forbidden to evict tenants?

When mortgage companies are routinely granting requests to delay payments without penalty?

Impact of proposal is actually minuscule

The proposed legislation itself is innocuous. In postponing property tax payments until August, the bill would help cash-strapped homeowners avoid a mere 1.3% interest per month, which for the average homeowner amount to about $13 a month.

Flora envisions that the delay would allow those who are presently sidelined from work or seeing their income reduced more time to come up with the money.

The full amount of the tax still must be paid, and the delayed collection would not materially impact government budgets or cash flow.

Homeowners deserve a break

Maricopa County, for instance, has a property-tax levy for 2019 of roughly $5.2 billion, of which it has collected $3.5 billion, or more than two-thirds. The funds pay for primarily education but also get distributed among state, county and local governments.

(Flora concedes that the delayed collection could mean less investment earnings, but that the figure would be minimal.)

The potential exposure to homeowners in distress varies among counties. In Maricopa County, less than half of the properties pay taxes directly to the treasurer's office. A majority are in mortgage, which pays the property taxes with money collected and held in escrow accounts.

In Coconino County, the reverse is true. Some 80% of the property owners pay the treasurer's office directly. That dynamic, along with what the tourism-dependent county is now feeling with high unemployment and low revenues, has Treasurer Sarah Benatar concerned.

A symbolic gesture is still welcome

Nonetheless, the financial relief contemplated is largely of the feel-good variety. Flora sees its biggest attribute a way to "take one more stresser" off the minds of homeowners.

Some county treasurers, anticipating the lingering effects of the COVID-19 economic shutdown, want legislation to either extend the delinquency date for 2020 property-tax dues (in essence, waive penalties and interest until Feb. 1, 2021) or to grant them authority to move the deadlines on their own in the event of emergencies the likes of a pandemic.

The economic fallout will inarguably persist. We won't know for some time its toll.

Those who are truly struggling to make property-tax payments are likely facing more extensive financial obligations that aren't going to be rescued by the waiving of interest or penalty fees. Or a three-month postponement.

The question is whether the Legislature will, for the here and now, provide a modicum of relief or none at all.